Likewise, it projected that “private consumption will advance 3.2 percent in 2022, although it will end the year still 3 percent below the 2019 average and more than 10 percent below that reached in 2017.” In 2021 growth reached 9.7 percent, so there would be a significant decline in the current calendar.
This is because “the recovery in the number of employed will not be that of 2021, the exchange rate will not fall behind and interest rates would tend to be in positive territory”.
“Added to this is the risk that a continuation in the acceleration of inflation will erode purchasing power,” warned the report and highlighted its impact on wages. “Although real wages could continue to show a margin improvement in the year-on-year comparison of the first few months, the good performance will be diluted as the months go by and high inflation persists,” he specified.
The performance of the quantities exported will also be lower than that observed in 2021 and would grow in line with the statistical drag. “One of the limitations for our external demand will be the limited growth prospects of Brazil, our main destination for industrial exports, which stand at only 0.3% for 2022. In this sense, the moderation of the expansion of China (+5%) and the rest of the world,” said the consultancy’s analysis.
Likewise, the study objected to the price of commodities due to the armed conflict between Russia and Ukraine and warned about the campaign’s estimates, which are conservative due to the effect that the weather may have on the thick harvest. Regarding investment, he projected for this year “growth of around 4 percent, hand in hand with a still favorable performance of construction.”
Regarding the production of goods, the report assures that the prospects for the harvest “could cause the agricultural sector to maintain limited or stagnant growth throughout 2022.” Meanwhile, he maintained that “the production of the manufacturing industry may be affected by the limited growth in Brazil, combined with the risks that a higher exchange rate will increase the cost of inputs and/or there will be complications for supply due to lower fluidity in the flow of imports in a context of scarcity of dollars”.
At the same time, The definitive reactivation of the sectors associated with tourism, recreation and transport was highlighted, after the total lifting of health restrictions.
Although the report recalled that “together these sectors represent around 12% of economic activity, so it is not expected that the boost in the economy in general will be similar to that observed with the recovery of industry, construction or trade in general, which together account for 40 percent”. Although both Goods and Services have already recovered pre-pandemic levels (in November, they were 7.7 and 1.2 percent higher, respectively), “the latter would have a little more room to grow in the short term.” term, while Goods would show a more pronounced slowdown compared to 2021″.
The risks for 2022
- Lower liquidation of agriculture, which could complicate the financing of greater imports that promote economic activity through a lower supply of dollars.
- The impact of the exchange-fiscal-tariff corrections with costs in the short term in terms of activity and consumption.
- The “carried over” improvement in terms of real wage growth could begin to fade if inflation remains high.
In its closing, the studio stated that “in 2022 the economic activity would show a positive performance“, although he clarified that it will be “moderate and subject to risks that must be monitored.”
Source: Ambito
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